Employee Satisfaction of HRM of Premier Bank Limited
Banks act as payment agents by conducting checking or current accounts for customers, paying checks drawn by customers on the bank, and collecting checks deposited to customer’s current accounts. Banks also enable customer payment via other payment method such as Automated Clearing House (ACH), Wire transfer or telegraphic transfer, EFTPOS and automated teller machine (ATM), bank borrow money by accepting term deposits and by issuing debt security such as bank notes and bonds. Bank lends money by making advances to the customers on current accounts, by making installment loan and by investing in marketable debt securities and other form of money lending. Bank provide almost all payment services and a bank account is considered indispensible by almost businesses, individuals and government. Non-banks that provide payment services such as a remittance companies are not normally consider as adequate substitute for having a bank account. Banks borrow most funds from households and nonfinancial business, but non-bank lenders provide a significant and in many cases adequate substitute to banks for lending savings too. A bank is a financial institute and a financial intermediately that accepts deposits and channel those deposits into lending activities, either directly or through capital market. A bank connects customers that have capital deficits to customer with capital surpluses. Due to their critical status within their financial system and the economy generally, banks are highly regulated in most countries. Most bank operate under a system known as fractional reserve banking where they hold only a small reserve of the fund deposited and lend out the rest for profit. They are generally subject to minimum capital requirements which are based on an international set of capital standards, known as the Basel accords. This is the basic definition of banking. These are the basic functions that a bank performs and almost every bank performs and almost every bank provides the same service. But nowadays these services are not enough. There are lots of many things included with a bank. All the banks in all over the world has a simple function that is collecting money from the surplus group and providing money to the deficit group. They all have to perform the same task. But with this task banks can differ by the retail banking, where banking institution can execute transactions directly with customers, rather than corporation or other banks. Some banks can provide internet banking, mobile banking, lockbox system etc. due to this difference some bank holding AAA credit and some bank holding BB credit. There is a difference on banking on the basis of schemes of banks. Some banking have schemes for higher, middle and lower class people. Scheme can also be differ on the basis of age, income level and different need for the customers. As well there will be difference in providing loans.
Background of Premier Bank Limited
The journey of the Premier bank limited began with a clear vision “Service First” back in 1999. A visionary entrepreneur and well known industrialist Dr. H. B. M. Iqbal along with thirteen successful & renowned business personalities laid the foundation of the bank to the best amongst the top financial institutions. Taking together with the nation, the Premier Bank Limited has passed 15 years of its voyages of corporate excellence and is flying fast to rise and prosper. With a long history of glory and success, the premier bank limited has rooted deep into a sound capital base and spread far and wide to a large network of branches, ATMs and SME channels. Since inception in 1999, it has crossed many significant milestones that stand testimony to its innovation and excellence in creating a new paradigm in banking industry. Its wing of operation have widened up to SME potentials, agricultural prospects and retail business opportunities. The Premier Bank has cut through the barriers of borders to go global as wide as possible. To widen global services for wage earners remittances, it has established fully owned subsidiary companies in several countries around the globe. Real times centralize online banking equipped with state-of- the art technology is the part and parcel of its service. The bank runs both conventional and Islamic banking operation with comprehensive range of product to meet up the variant needs of customers from different strata. Technology based plastic products and services such as debit card and credit card have already occupied a position in the core business operation of the bank. All the branches are resourced with cutting edge facilities controlled by highly efficient chain of staff to provide personalized services to the customers. The bank through its subsidiary also provides brokerage services and margin loan facilities in the capital market. As a capable absorbent of financial shocks, a much talked matter of the day, it has made its foundation strong with a capital base of tk. 7,291.19 million, deposit base of tk. 60,692.97 million, Capital
Adequacy at 10.55% percent, nationwide network of 64 no. of branches and with the loyalty & trust of 1,69,010 no of customers at the end of 2011. Strong capital base and well managed balance sheet give it confidence to face challenges and seize growth opportunities in the year ahead. From the very beginning, the bank set forth a dream to create a financial institution that would stand its in the crowd and meet the demand of 21st century. After successful 14 years of operation, the bank is justified in its mission and vision and well-set to step into it’s another promising year of progress. With an ongoing focus on effecting its strategies and priorities, controlling risks and expenses and growing its business platform with its strong foundation and the finest team of people working together, it will make the best of today for the benefit of all stakeholders. The Premier Bank Limited entered into a new age of promises and prosperity; well-positioned to ride on the post crisis recovery. It feels an obligation to open new highway for each and every community with a speedy business recipe. In line with global standard it has revamp its retail banking, SME, women entrepreneur finance divisions as well as introduced Elite Banking, Marketing & Brand communication department.
Products and Services
a) Account Opening
b) Term Deposit
c) Call Deposit
d) Account Opening Procedure
e) Who is a customer?
f) Who can open account?
g) Join Account
h) Opening a/c by a proprietorship business
i) Opening a/c by a partnership business
j) Public Limited Company
k) Non-Residential Account
l) Special Saving Deposit
m) Short Term Deposit
n) Savings And Short Term Deposit
o) Special Fixed Deposit Scheme
p) Islamic Banking Operation
q) Cash Management
r) SME Banking
a) General Credit
b) Small Business Loan
c) Term Loan
d) Customer Finance Scheme
e) House Building Loan
f) Project Loan
g) Industrial Loan
h) Letter Of Credit
i) Bills Under Letter Of Credit
j) Bank Guarantee
k) Loan Against Trust Receipt
a) Pay Order
b) Demand Draft
c) Telegraphic Transfer
d) Out Bill for Collection
e) Inward Bill for Collection
f) Locker Service
h) Capital Market Operations
j) Online Banking
k) Flow Chart of Import Mechanism
Loans and Advances
a) Lease Financing
b) Agriculture Financing
c) Loan for Salaried Person
d) Women Entrepreneurs Finance
e) House Repairing and Renovation Loan
f) Export Financing
g) Commercial Credit
h) Syndication Financing
i) Festival Loan
j) Loan Sanctioning Procedure for a Company
k) Steps Involving on the Sanctioning a Loan
l) Definition of LIM
Objective of the Report:
The objective of the report is to build a bridge between the theory of the entire graduation program and the real world through the interaction with the real life company. The main purpose of this report is to give a summary of what I am learning from my internship program at a third generation bank of Bangladesh, The Premier Bank Limited. To that end, the specific objectives are:
a) To provide an overview and analysis of HRM practices of Premier Bank;
b) To focus the dimensions of HRM practices of Premier Bank;
c) To propose a test for measuring employee’s satisfaction by HRM practices;
d) To examine weak points of HRM practices which affects employees’ satisfaction of Premier Bank;
e) To provide some suggestions for improving HRM practices and employee’s satisfaction of Premier Bank.
Human resource measurement
Human resource measurement is about valuing the contribution people make to the success of an organization, and the term ‘human capital’ describes the contribution made by human skills and knowledge to the production of goods and services (Becker, 1993). From these definitions, it is clear that efficient HRM practices are inevitable factor in determining the growth and prospects of any organization. Human resource is the most precious asset and delicate factor of production.
In this global competitive world, it is necessary to retain skilled workers in the organization by efficient HRM practices. Every organization operates its activities with the support of human resource which includes top level managers, executives, supervisors and other employees. The overall performance of any organization depends upon the extent to which human resource is effectively utilized. Highlighting the importance of people in organization, Khera (1999) opined that today when most business houses are obsessed with Total Quality Management (TQM) in order to stay ahead of competition, very few organizations realize that their most precious assets are their employees. Due to lack of efficient HRM practices reduces employee’s satisfaction towards their organization and ultimately that affects their commitment to the organization.
The Human Resources Management activities and policies if Premier Bank Ltd. includes several provisions and rules for the employees and may be amended from time to time by the board
Human Resource Management is by far the most important element of an organization. This is particularly true for a service organization like a commercial bank. Progressive companies pay special attention to recruitment, selection, training, orientation, evaluation, promotion and compensation of its members of staff.
It should be the duty of the top level management to examine the manpower of the bank at the end of each year in all categories for effective operations of the bank. The board of directors on the recommendation of the management will be the supreme authority to create additional post.
Creation of the post implies commitment of fund for long term. Therefore it is the responsibility of the management to examine the workload and do the job. Premier bank must recognize the importance of manpower estimation accordingly an oregano gram should be prepared for the Head Office, for each division and for each branch.
Recruitment through advertisement
Recruitment means giving publicity to the availability of the job in the bank and inviting application from prospective candidates. Recruitment covers talent hunting. Therefore, recruitment policy should aim at the right kind of talent. For the recruitment of Management Trainee Officer, Trainee Junior Officer and Trainee Junior Officer (Cash), premier bank goes for press advertisement in national dailies. The human resources division handles all matters relating to recruitment and selection to staff function.
Recruitment of officer at entry level:
Management Trainee Officer, Trainee Junior Officer and Trainee Junior Officer (Cash) shall generally be appointment by direct recruitment at the entry points. They shall be on probation for a period of one year, which will be extended by the competent authority if an officer fails to show satisfactory performance during the period of probation. On satisfactory completion of probationary period, they will be eligible for confirmation of appointment to respective post as follows:
Step of Recruitment procedures
a) All fresh recruitment shall be made through advertisement in National Dailies mentioning the eligibility criteria as mentioned.
b) Every candidate will appear for a written test. The subject matter of test should be General Knowledge, Mathematics, and English etc. Management from time to time may decide Economics/ Banking as may be decided by the Management from time to time.
For this purpose, Premier Bank Limited will take the help of outside experts such as IBA, Dhaka University or similar institutes for setting the questions, supervising the examination work, examining and marking the answer scripts and preparing a merit list of the candidates.
c) A candidate must secure minimum 60% mark in written Test to be eligible for VIVA/Interview. Total number of candidates to be called for VIVA will be 4 times the numbers of employees to be recruited provided they meet the 60% minimum mark criteria. The appointment will be made according to requirement on the basis of a panel to be prepared in order of merit by the Recruitment Committee and after approval of the competent authority.
d) All people to be appointed by the bank will have to undergo a medical test by the Bank’s approved Physician/Medical Officer so as to ascertain that they are physically and mentally in sound health. In other words no person shall be appointed in the service of the Bank unless he/she is declared physically and mentally fit by a medical officer of the Bank or by any other Medical authority specified by the Bank in this behalf.
The selection process is a series of specific steps used to decide which recruits should be hired. The process begins when recruits apply for employment and end with the hiring decision. The following steps are followed for systematizing the selection procedure in case of selection through press advertisement:
Step of selection procedures
a) Initial screening interview
b) Completing application form
c) Employment tests
d) Comprehensive interview
e) Background investigation
f) Conditional job offer
g) Medical or Physical examination
h) Permanent job offer
Training and Development
The Premier Bank Ltd. organizes training and development program for the employees, which could improve their ability to perform their job appropriately. This involves the changing of skills, knowledge, attitudes and social behavior of the employees. The bank arranges the training and development program in two ways such as externally and internally. In external way, the bank only nominates the appropriate employees for the training according to their necessity in the seminars, workshops and short/ long course. Generally the external training program is organized by the Bangladesh bank, Bangladesh Institute Of Bank Management (BIBM), TACK
Training Academy, SEDF, various financial organization (Citi bank N.A., American Express Bank, HSBC Bank),and many other financial and non financial organizations. On the other hand, in internal way, bank is directly involved in arranging training and development program. In this context, bank conducts various sorts of programs at the bank’s own training institute namely The Premier Bank Training Institute. Premier bank prepares 365 days training program. Before preparing the one year long training schedule, the bank conduct training need analysis at the beginning f the year. From the training institute it offers various training program such as:
Foundation Training, Credit Risk Management, CAMEL rating, Asset Liability Management, Foreign Exchange Risk Management, SWIFT etc.
On the job training
On the job training places the employees in the actual work situation and makes them appear to be immediately productive. It is learning by doing. For jobs that are difficult to simulate or can be learned quickly by watching and doing.
Off the job training
Off the job training mainly include some techniques such as classroom lectures, conference, demonstration etc.
Job rotation represents an excellent method for broadening the skills and knowledge of potential employees. To increase the manager’s experience and allowing the manager to absorb new information, it can reduce boredom and stimulate the development of new ideas.
The bank is also providing skill and knowledge development program by nominating employees in overseas program. Premier Bank arranges this training program in association with Standers Chartered Bank, American Express Bank, Citi Bank NA. The overseas training program is already taken place into India, Nepal, Malaysia, Philippine, Hong Kong etc.
Regulations of Pay and Allowances
a) The scales of pay and other allowances of officers and other employees of the bank shall be as determined by the board from time to time.
b) Subject to the provisions of sub-rule 3.6.1 the internal pay of an employee appointed by direct recruitment of the post shall be the minimum of the scale of pay laid down for the post
c) Notwithstanding anything contained in sub-rule 3.6.2 when a person with require qualification and competence is not available for direct recruitment at the minimum of the applicable scale, the competent authority may, after considering the qualifications and experience, grant higher initial pay in the pay scale of the post.
d) The initial pay of the employee promoted from a lower post to a higher post shall be fixed at the minimum of the scale of the higher post.
e) An employee appointed on promotion shall begin to draw pay in accordance with the provision of the sub-rule 3.6.4 from the day he/she joins the higher post.
f) When an increment in pay falls due to an employee, his/her records shall be submitted to the competent authority and where the service records are satisfactory; the competent authority shall sanction the increment.
g) Annual increment of an employee will be due on joining anniversary or promotion anniversary. However, approval of the increment depends on the competent authority based on the performance for which performance appraisals must be completed.
h) Award: an award in cash or in kind may be granted to an employee for outstanding academic and professional achievement
Premier bank ltd. believes in providing efficient service as well as sufficient benefits to the employee at their satisfaction. The benefits and facilities provided by the banks to its employee are as follows:
All regular employee of the bank including the probationary officers are entitled to two festival bonuses on the occasion of Eid-ul- Azha worth of one month’s basic pay irrespective of their date of joining and religion. Moreover the board at its discretion may sanction incentive bonuses form the profit earned by the Bank.
Provident fund is the service benefit, which allows regular employees or the bank to save 10% of their basic salary in every month. This bank also contributes an equal amount in the fund as the employees amass an attractive sum. Every confirmed and fresh employee will be entitled to bank’s contribution to provident fund benefit after completion of 5 years of service in Bank and the benefit will be paid to him / her on retirement.
This is a benefit scheme of the employees of the Premier Bank Ltd. for their security after they leave the institution on retirement or otherwise. The Board Of Director Of The Premier Bank Ltd have framed the “Gratuity” rules in exercise of power under article 128 of the article 128 of the article of association of the company.
The benefit is paid to the nominee or heir in case of the death of the employee. However employees with the following characteristics are not entitled to this benefit:
a) Employees, who are dismissed from the service of the bank on account of any misconduct, breach of discipline
b) Employees who resign or discontinue the service without permission
c) Employees appointed on contract basis
d) Employee appointed on temporary basis
Reimbursement of the cost of medical treatment requiring hospitalization are allowed to an employee if he or she meets with an accident while on duty and the bills for reimbursement shall be prepared with supporting vouchers duly signed by the employee. The board at its discretion may also grant lump-sum amount to permanent employees of the bank in the following cases:
a) Major surgical operation
b) Medical treatment of grievous diseases of accident requiring hospitalization
The bank provides this type of benefit to permanent employees and only for two issues in her whole career. The employee on contract, however not entitled to this benefits.
Staff house building and car loan
The bank grants house building and car loan for the management executives. The loan amount does not exceed 75% of the total cast and it amortized in every month from their salaries.
The employees who are work in the branch, they all have an insurance. It is called group insurance. If unfortunately any worker fall an accident from this insurance policy he/she get money for their well being.
a) The field of Human Resource Management is vast and its functions and operations are specialized. A large and mid-level organization usually require a dynamic team comprising of an adequate number of skilled, knowledgeable and experienced personnel.
At the premier limited a very limited number of officers are assigned to accomplish all the functions and task relating with this field.
b) It is strange thing that despite 14 years of banking operation, Premier Bank Ltd is yet to develop a well-organized, coordinated and documented human resources management policy of its own. Most of the policies are copied from write-up of bankers working in other organization.
c) Another major problem is that, the HR division of the Bank does not get full freedom in accomplishing their tasks and function properly. The Board of directors takes all decisions and gives direction to the HR division toward their regular activity.
d) According to Bangladesh Bank rule, every employee is entitled to get 15 days mandatory leave in a year. But in Premier Bank this rule is sometimes neglected
e) The Bank uses “Ultimus Software”. Where the RO information is stored.
f) Some employees think that top management should change because they are not cooperative and also biased.
g) Employee selection process is eye wash maximum employees are recruited depend on personal linkage.
h) Some employees said that there is more nepotism. Around 80% of employees are from Barisal.
i) If an employee wants to leave, he should replace someone for doing his responsibilities. Sometime it is very difficult for them. They think this type of replacement is duty of top management. But top management ignores those responsibilities.
j) If an employee perform well & work hard, then he will not get promotion. Some branches specially the SME branch has less adequate number of skilled manpower than others
k) Premier Bank has only 92 branches throughout the country and 75% branches are in Dhaka city
l) Some weaknesses are come up during the interaction with the employee regarding leave policy and retirement policy
m) In case of interview candidate is called four times the empty seat
n) The bank does not organize any career-counseling program for the employee’s development of career
o) Another limitation revealed regarding pay scale is that a large gap of paying salary and bonuses between the Premier Bank Ltd and its competing bank. For example Bank Asia paying Management Training Officer(MTO) over TK.50,000 where Premier Bank is paying salary of only TK.41,000
a) Restructure of the salary and pay scale: it is revealed from the study that the Premier Bank’s salary and bonuses are comparatively lower than those of its competing bannks. The Bank does not intend to increase the salary and bonus at the level of its competing banks and also as per the profit earnings. Besides this, the bank does not provide any overtime facility to its employee. In this regard, Premier Bank should upgrade its salary structure and provide overtime facilities for its employees
b) Career counseling program: the bank should take necessary steps to organize career counseling program for the employee’s development
c) Equal employment opportunity: Biasness should be avoiding from the higher level post in case of recruitment and selection. One of the conditions of Premier Bank is that the Bank invites applicants from only recognize University such as IBA, NSU, Dhaka University, IUB and BIBM. In this regard PBL should also consider applicants from other private universities to provide equal employment opportunity
d) Implementation of leave rule: 15 days leave is mandatory for every employee in a year which is not maintained by Premier Bank. So necessary steps should be taken to implement this rule.
e) View of the top management: the top management heavily relies on the information provided by the HRD. This division collects information through the close attachment of functional level and employee and provides it to the top level management to implement decision for the well being of the employee achievement Regarding the evaluation and recognition of performance top management level should be change. In this contest top management should give emphasis on the HR division
f) Selecting candidates for interview: for calling the candidate for interview four times candidates are selected. Instead this conventional practice they should use pyramid system
g) Proper documentation of Human Resources Management: the bank should prepare a formal, well organized and suitable human resource management policy in a documentary form. This should cover the legal and operational aspects of human resource functions as well as the strategic intent of the bank
h) Increase the number of officers at HR division: the bank should focus on the number of officers at HR division having the right qualifications. They should also be trained up properly and allowed to specialize on this type of job
The study shows the bridges between employees’ satisfaction and various dimensions of HRM practices. In this study, we considered seven major factors which represented most of the human resources management practices followed by Premier Bank Limited private banks. The study reveals that some Human Resource Management practices exercised in the Premier Bank does not satisfied the employees equally. Most of the employees are dissatisfied with compensation package followed by reward and motivation and management style. It is obvious that HRM practice in the Premier Bank has not been fully developed and there is the urgent need to develop new directional focus that will ensure an efficient and effective HR practices.
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